Walgreens Squeezes Gains Out Of Q1

Walgreens gained slightly in the first quarter as the company awaits the approval of its acquisition of Rite Aid.

For the first quarter ended November 30, Walgreens Boots Alliance posted company net earnings of $1.05 billion, or 97 cents per diluted share, versus $1.11 billion, or $1.01 per diluted share, in the year-prior quarter.

Adjusted company net earnings were $1.2 billion, $1.10 per diluted share, the company stated, versus $1.13 billion, or $1.03 per diluted share, in the quarter a year previous. Adjusted earnings per diluted share beat a MarketBeat analyst average estimate by a penny.

In the retail pharmacy USA division, Walgreens stores recorded first quarter sales of $20.7 billion, up 1.4% versus the 2016 quarter. Comparable store sales increased 1.1% versus the quarter a year before. Comparable retail sales in the retail division slipped 0.5% in the quarter year over year, the company reported, due to declines in the consumables, general merchandise and the personal care categories, partially offset by increases in the health and wellness segment, and the beauty segment.

Sales in the first quarter were $28.5 billion, down 1.8% from the year-ago quarter on a general basis but up 1.1% on a constant currency basis, Walgreens Boots noted.

Walgreens Boots executive vice chairman and CEO, Stefano Pessina, said, “Overall, we are pleased with the progress this quarter, with results in line with our expectations. We continue to anticipate that growth in the second half of fiscal 2017 will reflect the new strategic pharmacy partnerships we announced last year. As a result, we have raised the lower end of our fiscal year guidance by five cents per share. In addition, we continue to work toward closing the pending acquisition of Rite Aid Corp. in the early part of this calendar year.”

Walgreens Boots noted that the company is actively engaged in discussions with the United States Federal Trade Commission regarding its pending acquisition of Rite Aid Corp. Walgreens Boots and Rite Aid entered into an agreement to sell 865 Rite Aid stores and certain assets to Fred’s for $950 million in an all-cash transaction. The divestiture is subject to FTC approval as well as the approval and completion of the pending acquisition of Rite Aid by Walgreens Boots Alliance and other closing conditions.